Which Mutual Funds can give the best returns in the long run?

—Name withheld on request

In investing, he says that it is more important to give time to your investment than to give it time. This will work well for you as you are planning to start investing in mutual funds at an early age. Mutual Funds are one of the best investment tools for all types of financial goals.

These goals can be short, medium or long term in nature. MFs have different categories of funds for these goals. For you too, we suggest that you define your financial goals and then invest accordingly. You can consider wealth creation as your goal at this stage and plan to use the accumulated corpus for various goals at a later stage.

As you are young, you can take a slightly more aggressive approach in building your portfolio. You can mainly diversify your investments in large, large and mid cap and flexi cap funds. You can also consider investing in mid cap funds, however, the allocation may be limited to 10% initially. To keep the investment well diversified across funds and fund houses, you can consider an allocation of up to 15-20% in one fund at the time of investment.

We have in our view the following funds which you can consider investing from a long term perspective – Any Nifty Index Fund (18%), Canara Robeco Bluechip Fund (18%), Parag Parikh Flexi Cap Fund (18%), Mirae Emerging Bluechip Fund (18%), IIFL Focused Equity Fund (18%) and Kotak Emerging Equity Fund (10%).

Many investors follow the strategy of scaling up their SIPs every year which helps them to stay disciplined and build a high corpus as they move ahead in their careers. You too can follow this strategy as it is very helpful in the long run.

Reviewing your investments every six or 12 months to check on the progress of your investments is an equally important part of your overall investment plan.

Harshad Chetanwala is the co-founder of MyWealthGrowth.com.

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